Where should I park my emergency fund?

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  • Aug 12th, 2020 9:43 am
Jr. Member
Jan 21, 2012
157 posts

Where should I park my emergency fund?


Over the years, I have accumulated $20K in my emergency fund. I currently hold the amount in a high interest saving account offered by a bank.

I thought about moving the money in a TD money market mutual fund account to earn a better return. However, when I saw their MER of 0.6%, I was not sure if it was worth the hassle.

Any comments /suggesetions would be much appreciated.

9 replies
Jan 17, 2018
285 posts
I had my 20k emergency fund parked at EQ bank for the 2.0%.

Suggest you keep it in a HISA.
Deal Addict
Apr 21, 2012
1261 posts
I put it with CTFS HISA at 1.8%. I didn’t feel like opening another bank account.
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Sr. Member
Feb 13, 2008
813 posts
Edmonton, AB
I have mine in RBC high interest eSaving and Tangerine interest account. In case of an emergency I will use my cash along with credit lines.
Deal Fanatic
Oct 7, 2007
9193 posts
Handcake wrote: I had my 20k emergency fund parked at EQ bank for the 2.0%.

Suggest you keep it in a HISA.

I wouldn't risk my emergency fund.
Deal Fanatic
User avatar
Feb 28, 2006
9460 posts
Richmond Hill
Emergency funds should be in HISA. I alternate between EQBank and if Tangerine has a higher than 2%+ rate.
Deal Expert
Jan 27, 2006
20506 posts
Vancouver, BC
I wouldn't put my emergency funds in ONE place as I don't know what type of emergency would require me to withdraw those funds.

A couple of scenarios that you might want to think about. Yes, the odds of them happening are low but that's what an emergency fund is about, isn't it?

1. Individual bank failure. This might be the traditional run on the bank OR it might be something new like a cyber-attack which causes the bank to close until the regulators come in. During that time, you may or may not have access to your money. So, you might want to spread the money around a bit.
2. Transactions between banks fail. If you have your entire emergency fund in another bank for a higher rate but don't do any other transactions with them, the system to transfer money between that bank and your main bank may have issues when you need the money. So splitting the funds between your main bank and the higher return bank might be a good option.

If you want to put money into a trading vehicle such as a money market fund, then be prepared that when you sell it, it might take a few days for the money to arrive in your account (as long as the neither of the above situations happen) so may want to have a small buffer emergency fund to draw from while the trade settles.
Deal Addict
Aug 15, 2009
2378 posts
RaOne1 wrote: Tangerine offers a promotional rate of 2.5%. Are you saying that you swtich between EQ and Tangerine every six month? ... lsrc=aw.ds
Tangerine promo of 2.5% is for new clients. Existing clients are on loterry meaning you will/or never receive a promo. Some have had success in calling to have something similar.


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